DESIGN AND IMPLEMENTATION OF A COMPUTERIZED PERSONNEL AUDITING SYSTEM OF A LOCAL GOVERNMENT ADMINISTRATION

DESIGN AND IMPLEMENTATION OF A COMPUTERIZED PERSONNEL AUDITING SYSTEM OF A LOCAL GOVERNMENT ADMINISTRATION

ABSTRACT

Regrettably, despite the fact that the statutory allocation is in the doldrums several years after independence, people’s expectations of the government continue to climb. In addition to paying salaries and allowances to its employees, every responsible government is always eager to offer at least the most basic facilities for its citizens. This is a challenging objective to meet today due to the issues inherent with manual staff income tax auditing, which aids revenue production in states. The manual approach can only create a report after a lengthy amount of time, which could be up to two weeks. It could also lead to a situation in which exhaustion discourages auditors from doing a thorough job. Based on the foregoing points, as well as others not mentioned here, an analysis and feasibility study of the old system (manual) was conducted to determine the need for a new system capable of overcoming the entire setback associated with the manual process. The use of a computer in personnel income tax audits can reduce human errors and is thus required for increased revenue. This software was created using Visual Basic 6.0 as the programming language. It is an event-driven programming language that works well with Windows applications.

COMPUTERIZED PERSONNEL AUDITING SYSTEM is a key word.

1.0 INTRODUCTION TO CHAPITRE ONE

Because modern societies are technologically driven, their characteristics are changing at a rapid pace. One of the current advances in the information sector that will have a significant impact on business (better company and society) is improved computer literacy among leaders and the general people, which will facilitate the transition to computerization. That is, the use of a computer in any process has been employed in almost every field of human endeavor. It has found widespread use in both the private and public sectors of the economy.

Today, there is no gain saying revenue for the government in Nigeria; we hear and see computerization projects in NITEL, NEPA, and so on; the government has decided on these projects because of their long-term advantages over current manual techniques.

In reality, no meaningful society can survive and function efficiently today unless the processing system is computerized. The researcher decides to conduct the study based on the aforementioned premise and the benefits inherent in computerization.

To increase revenue and provide important services, the government should be encouraged to computerize its personnel income tax collecting medium and to implement computerized audit procedures to determine or ensure actual compliance with revenue provisions and standards. To accomplish this duty, the state board of internal revenue, the sole agency for revenue production in Abia state, should be fully equipped with contemporary computers and computer literate staff required to carry out the concepts of assessment and auditing. The manual auditing procedure and tactics now used in the auditing of personnel income taxes have a negative impact on both customers (agents) and employees, particularly in critical situations such as a limited time frame for computer auditing. The manual approach can only produce reports after a lengthy period of time, which might be up to two weeks; these delays will result in lost revenue for the state. It could also lead to a situation in which exhaustion discourages auditors from doing a thorough job. We must remember that a computer is a system that does not tire like a human and can handle multiple tasks with the same proficiency as the first.

The manual auditing technique also allows dishonest tax employees to modify and fabricate data in order to gain an unfair advantage. All of these issues, together with the others described above, necessitate the automation of the audit procedure included in the Abia state personnel income tax system.

In general, computerization components should provide technical help in the design, programming, listing, and supplementation of a comprehensive computerized auditing system of personnel income tax administration.

1.2. THE STUDY’S HISTORICAL BACKGROUND.

This analysis was conceived on the assumption that the statutory allocation formula, which has remained at 24% to the state, has continued to dither in relation terms, forcing the state to look within for domestically generated money. As a result, efforts should be undertaken to change the current manual system of tax auditing in order to optimize the government’s revenue yield. Address the issue of misplaced records, falsification of facts and figures, and bring in better services from tax officials. Implementing a computerized approach could also lead to greater efficiency in the use of government resources and a reduction in tax evasion.

STATEMENT OF THE PROBLEM 1.3.

At the moment, auditing of the staff income system in Abia state board of internal revenue is done manually and stored in audit works. Sheets are saved in files. It is normally saved in the board’s monitoring unit. The buildup of this document in files causes a lack of storage space, the cost of fumigation to avoid insect attack, the cost of cleaning and shelving.

Similarly, some of the issues raised by the manual method include: – Time spent accessing clients’ (agents’) records in following years (that is, searching for records).

The procedures for upgrading files make the entire process tedious and uninteresting. There could be an error in computing taxpayers’ income and taxes due. In other words, there may be a problem with incorrect assessment; there could be delays in issuing audit reports as a result of so many processes and procedural complicity (there is easy sensibility of the taxation records other than the employees who generated it). There is inefficiency in the use of resources during the auditing process.

1.4. THE STUDY’S OBJECTIVES

The study’s aims are to develop a new computer-based system to alleviate problems associated with the manual method (Computerized Personnel Auditing System). These goals are as follows:

To offer an effective computer-based system for easier documentation maintenance and retrieval of data about taxable employers in Abia state.

To upgrade the auditing (Computerized Personnel Auditing System) system in order to increase efficiency.

To provide more accurate and timely data for government decision making.

To facilitate quick access to stored data at random in order to aid in management duties.

To secure labor employers’ trust in Abia state’s personnel income tax system.

To eliminate all forms of corruption in the auditing of personnel income taxes.

To improve tax auditor efficiency by lowering the volume of manual tasks at their disposal.

To limit the role of tax evasion among labor employers.

To reduce stacks of dusty physical files in offices, hence keeping the office nice and providing a very healthy working environment.

Improve the auditing processes of income taxpayers and thus deliver immediate results on any operation necessary on a tax payer’s file.

It provides a current smart information system that provides both environmental and internally generated information to new staff in the event of replacement or stranger personnel.

1.5. THE STUDY’S IMPORTANCE

Since the concept of the world as a global village developed in the 1990s, computer technology has advanced rapidly in practically every sphere of human endeavor.

An analogy between manual systems and computer systems (Computerized Personnel Auditing System) provides a beginning point for management comprehension of computer systems in both the private and public sectors. This advancement has paved the way for the advancement of information management, necessitating the necessity to computerize the tax auditing system to fulfill the government’s current needs.

This study will assess the current manual system of tax auditing as well as build a new system to address the shortcomings inherent in accurate and efficient tax auditing in Abia state.

The new system that will be built will have all of the benefits of a computerized system, such as time, flexibility, interactivity, and the creation of a good database.

1.6. STUDY OBJECTIVES

Due to the level of information technology in Nigeria, particularly in Abia state, the scope of this project is personnel income tax audits in the Abia state board of internal revenue. Some manual operations will be required to complete the auditing process, such as notification of the auditing exercise. Due to the time constraints associated with this project, it will result in the award of a national diploma (ND) after two years of academic excellence. The new system will include auditing of pay_as_you_earn tax payers (case study).

LIMITATIONS OF THE STUDY.

This project effort was hampered by a number of constraints, making it impossible to expand beyond this extent. The following were the most pressing factors:

insufficient funds

electricity supply for epileptics

Inadequate data supply; insufficient time for project development.

1.7. TERM DEFINITION

AUDIT WORKING PAPERS: These are columns of paper on which income records for employees of audited corporations are kept. They are source record documents, with provisions for the schedule number, the name of the person who prepared the working paper, and the dates of preparation in the top right corner of the working papers. The working paper’s top left corner is made up of serial number column 2 for employee names and column 3 for basic salary. Columns 4-15 are for the months of January to December, while column 16 has two rows and may handle up to twenty (20) employees per sheet of 40 rows, with the second row of the two rows per employee used to record monthly tax deducted.

A.C. Tabansi (2000) defines IT FORM-INCOME TAX FORM A as “a form given to eligible tax payers to complete and return to the tax for their assessment on which the personnel income tax audit is based.” It is divided into six (6) sections labeled A through F. Details span from tax payer human data to income source, and finally declaration and attestation to the truth of the claimed income and information contained in the form.

TAX ON PERSONNEL INCOME: According to A.C. TABANSI,(2000), this represents taxes on the wages of employees of enterprises, organizations, and institutions. It includes the base wage as well as supplementary components such as a tent, transportation allowance, entertainment, and other items up to a certain amount set by government legislation. The government has used taxes to curb inflation and other economic issues.

SYSTEM: This is an overused word that means different things to different people. G.D Clarke defines a SYSTEM as an ordered collection of items, units, or components that are interconnected and interdependent and share a shared set of fundamental goals such as production and satisfaction. He believes that the following are the components of any system:

Output Process Boundaries

Subsystem Environment

MONITORING UNIT: According to the handbook, this is the unit in charge of personnel income tax audits in the Abia state board of internal revenue. It is led by a principal interceptor of taxes who works in collaboration with the chairman of the board of internal revenue via the director direct taxes. He is assisted by other tax inspectors with accounting and managerial backgrounds, as well as electrical officers who carry out regular tasks required for the unit’s day-to-day operations.

IT FORM 45:- According to A.C. Tabansi (2000), this is an acknowledgement slip prepared by the sender of a letter and signed by both the recipient and sender in which the recipient acknowledges receipt of a letter requesting him to supply facts necessary for tax audit report submission as well as correspondences established between the board and outside parties.

IT FORM F3 (TAX DEDUCTION CARD): According to A.C Tabansi (2000), the IT form f3 is a card prepared by the payer assessment unit of the tax office that provides a guidance to routine income tax deductions to employers of labor. The deductible taxes are determined by the income declaration form. The card shows the employee’s gross earnings, gross relief, gross tax owing, and monthly tax deductions. The tax card is handed to the employee, who uses it to deduct taxes throughout the year. These cards are batched and delivered to the various tax offices at the end of the year, along with form H1, the annual return.

AUDITING:- It is useful to see how Ngwakwe C.1998 defines auditing; audit is a Latin word that means “He hears” conventionally of records and draft accounts produced by companies/organizations by tax auditors to enable the auditors to form opinions on the adequacy or inadequacy of the system. It also aids in determining the extent to which laws and regulations have been followed. The end outcome, as required by law, is for the auditor to place himself in a position to express an opinion about.

The company’s profit and loss statement.

The balance sheet provided a true and fair picture of the financial status at the end of the fiscal year.

If the financial statements are in accordance with the law.

Personnel auditing system that is computerized.